The Food Casino

The system is feeding about 6-in-7 of the world's population.

Droughts in Russia, monsoons in Pakistan. Weather once again is being blamed for lowering expected global food production. But by focusing on the weather, a more significant factor behind high prices escapes scrutiny: a massive amount of financial speculation in food commodities. This was a key cause of the 2008 food crisis. And it’s returned. In short, the agriculture bubble is back. In 2010, wheat climbed 47 per cent, soybeans were up more than 34 per cent, and corn rose 52 per cent. Until recently, 2011 has seen little meaningful reprieve for consumers.

Perhaps with some exceptions, genuine shortages do not appear to be responsible for sky-rocketing food prices. Take wheat as an example. On July 12, the U.S. Department of Agriculture projected global inventories as a percentage of consumption to be a healthy 27.18 per cent for the 2011/2012 crop year. Historically this is a more than adequate buffer against supply shortfalls. U.S. Commodity Futures Trading Commission official Bart Chilton stated on March 15 that commodity speculation has never been higher, referring to data showing agriculture market bets 20 per cent greater than the frenzied levels of June 2008.

Higher costs for coffee and chocolate in rich countries are mere nuisances compared to increased hunger and malnutrition in the developing world. (This is not to ignore the serious hardship experienced by low-income citizens in wealthier countries.) Developing nations’ households spend a much larger percentage of their income on food than those of developed countries. In fact, food comprises 50-90 per cent of household expenditures among the poorest in developing countries. This leaves very little financial cushion in the event of price spikes. Citing recent studies, a paper presented at a World Bank conference last year estimated that between 100 and 200 million people were thrown into poverty by the 2008 food crisis. In February, the World Bank estimated that 44 million people have been pushed into poverty by food price spikes since June, 2010.

More than 150 nations run a deficit on their food trade - they import more food than export it. The food deficit is worse than the oil deficit, measured by global food import dependence. No Einstein is needed to point out , it is not possible to have a world made up of countries all of which are net food importers. By 2017 on current trends, the USA will be running a net trade deficit on food and agricultural products.

Global agribusiness is very comparable to, and dependent on global banking. Through massive corporate consolidation in agriculture, food and farming, coordinated and convergent global food regulations, and chaff dollars euro and yen thrown on the gaming play tables of unrestrained food commodity speculation, agribusiness creates food shortage, and has a vested interest in food price explosions. Commodity-oriented agribusiness is a corporate profit tool, but farmers net few or no gains from this. Farmers are low-tech debt-serfs in the low income countries, and are high-tech debt-serfs in the high income countries.

Agribusiness is lethal to the planet and to our future. It wreaks chemical damage, genetic modification and systematic damage right across the food web, both locally and across continents. It punches deep holes in the very base of biosystem and ecosystem operation - for example by almost wiping out bee populations in dozens of countries, cutting their numbers by as much as 75% since 2005 in some cases. We have constant, sad and shameful proof of the damage dome by agribusiness, in the shape of collateral dead natural systems, right across the planet. The seven seas, for example, have been so ruthlessly predated by deep sea and inshore fishing, that large and ever-growing numbers of food fish species will take decades or even centuries to recoup numbers - or die out entirely. In the killing fields, that is agribusiness fields, the damage keeps on growing. The biosystem damage reducing future bioproductivity - the ability of living systems to provide us food - continues 24/7. Agribusiness employs a host of methods and tactics which make this certain, like destroying biodiversity to the point where only GM seeds for crops totally dependent on pesticides and fertilisers can grow in near-sterile, compacted, degraded and eroded soils, called "fields".

But agribusiness has only one strategy - make and accumulate profits.

Adapted from here and here